U.S. v. Great American Veal, Inc., CIV. 96-4110(HAA).

• Decision Date: 16 March 1998
• Docket Number: No. CIV. 96-4110(HAA).,CIV. 96-4110(HAA).
• Citation: 998 F.Supp. 416
• Parties: UNITED STATES of America, Plaintiff, v. GREAT AMERICAN VEAL, INC. and Thomas Burke, Defendants.
• Court: U.S. District Court — District of New Jersey

998 F.Supp. 416

UNITED STATES of America, Plaintiff, v. GREAT AMERICAN VEAL, INC. and Thomas Burke, Defendants.

No. CIV. 96-4110(HAA).

United States District Court, D. New Jersey.

March 16, 1998.

Neil Rodgers Gallagher, United States Attorney's Office, Newark, NJ, for Plaintiff.

David Carmen Pennella, Pennella & Claps, Dover, NJ, for Defendants.

OPINION

ACKERMAN, District Judge.

The United States brought this action against defendants Great American Veal, Inc. ("GAV"), and Thomas Burke to recover civil penalties previously assessed against the defendants by the United States Department of Agriculture ("USDA") pursuant to the Packers and Stockyards Act, 1921, as amended and supplemented, 7 U.S.C. § 181 et seq. (the "Packers Act").¹ Presently before the court are the following: (1) defendants' motion for summary judgment to dismiss the complaint; and (2) plaintiff's cross-motion for summary judgment. For the reasons set forth below, defendants' motion for summary judgment is DENIED, and plaintiff's motion is GRANTED.

I. BACKGROUND & PROCEDURAL HISTORY

The pertinent facts in this case are not in dispute. GAV was engaged in the business of buying livestock for slaughter and manufacturing or preparing meats for sale. Declaration of Neil R. Gallagher ("Gallagher Decl."), Exh. A at 5. GAV was subject to regulation by the USDA pursuant to the Packers Act. Burke was the president as well as the owner of all of the outstanding stock of GAV. Id., Exh. A at 6.

By Decision and Order dated January 19, 1989 (the "January 19, 1989 Order"), and pursuant to 7 U.S.C. § 193, the Judicial Officer of the USDA, acting as and for the Secretary of Agriculture (the "Secretary") under authority delegated to him to perform regulatory functions,² ordered the defendants, inter alia, (1) to cease and desist from certain practices which were deemed unlawful under the Packers Act, and (2) to pay a civil penalty, jointly and severally, in the amount of $129,000.00. See Gallagher Decl., Exh. A at 58. The January 19, 1989 Order required the defendants to pay the penalty "not later than the 90th day after the effective date of this Order ...." Id., Exh. A at 58-59.

The defendants appealed the January 19, 1989 Order to the United States Court of Appeals for the Third Circuit. See 7 U.S.C. § 194(h) (investing exclusive jurisdiction in Court of Appeals "to review, and to affirm, set aside, or modify such orders of the Secretary"). On February 22, 1989, the Judicial Officer entered an order staying the civil penalty provisions of the January 19, 1989 Order pending the defendants' appeal to the Third Circuit. Gallagher Decl., Exh. C. The Third Circuit Court of Appeals entered a Judgment Order on November 27, 1989 denying defendants' petition for review and affirming the January 19, 1989 Order. Gallagher Decl., Exh. D.

Based on the Third Circuit's Judgment Order, and upon application by the Secretary, the Judicial Officer lifted the previously entered stay by order dated May 22, 1991. The substance of the May 22, 1991 Order, in its entirety, read as follows:

The stay order previously issued in this proceeding is hereby lifted. The order filed January 19, 1989, provided that the civil penalty shall be paid "not later than the 90th day after the effective date of this order ...." The "effective date of this order," insofar as payment of the penalty is concerned, shall be the date of service on respondents of the present order removing the stay order.

Id, Exh. E. The May 22, 1991 Order was served on Burke and GAV on June 4, 1991 and June 5, 1991, respectively. See Affidavit of Joyce A. Dawson at 2.

The defendants failed to pay the civil penalty. The instant action by the United States to enforce the imposition of the civil penalties was commenced on August 27, 1996.

II. DISCUSSION

A. Summary Judgment Standard

Summary judgment may be granted only if the pleadings, supporting papers, affidavits, and admissions on file, when viewed with all inferences in favor of the nonmoving party, demonstrate that there is no genuine issue of material fact and that the movant is entitled to judgment as a matter of law. Fed. R.Civ.P. 56(c); see Todaro v. Bowman, 872 F.2d 43, 46 (3d Cir.1989); Chipollini v. Spencer Gifts, Inc., 814 F.2d 893, 896 (3d Cir.), cert. dism'd, 483 U.S. 1052, 108 S.Ct. 26, 97 L.Ed.2d 815 (1987). Put differently, "summary judgment may be granted if the movant shows that there exists no genuine issues of material fact that would permit a reasonable jury to find for the nonmoving party." Miller v. Indiana Hosp., 843 F.2d 139, 143 (3d Cir.), cert. denied, 488 U.S. 870, 109 S.Ct. 178, 102 L.Ed.2d 147 (1988). An issue is "genuine" if a reasonable jury could possibly hold in the nonmovant's favor with regard to that issue. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A fact is material if it influences the outcome under the governing law. Id. at 248.

The party seeking summary judgment always bears the initial burden of production, i.e., of making a prima facie showing that it is entitled to summary judgment. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). This may be done either by demonstrating that there is no genuine issue of fact and that as a matter of law the moving party must prevail, or by demonstrating that the nonmoving party has not shown facts relating to an essential element of the issue for which it bears the burden. Id. at 322-23. Once either showing is made, the burden shifts to the nonmoving party who must demonstrate facts supporting each element for which it bears the burden, as well as establish the existence of genuine issues of material fact. Id. at 324.

The sole issue raised in the respective motions for summary judgment is whether the plaintiff's complaint for recovery of the civil penalty is time-barred under the applicable statute of limitations. There is no dispute as to the underlying civil penalty imposed upon the defendants. See Memorandum in Opposition to Plaintiff's Motion for Summary Judgment ("Dfs.Opp.Brf."), at 2 ("At this juncture, there is no continuing dispute that the underlying penalty imposed by the Department of Agriculture is beyond challenge and could have been enforced if timely suit was brought.").

B. The Packers Act and 28 U.S.C. § 2462

The Packers Act was enacted to regulate meat packers by prohibiting unfair, discriminatory or deceptive trade practices. See Stafford v. Wallace, 258 U.S. 495, 513, 42 S.Ct. 397, 66 L.Ed. 735 (1922). The legislation embodies a comprehensive effort on the part of Congress to "remedy a number of undesirable practices which had arisen in connection with the buying and selling of livestock at the major stockyards." United States v. Woerth, 130 F.Supp. 930, 936 (N.D.Iowa 1955), aff'd, 231 F.2d 822 (8th Cir.1956).

In order to effectuate the overall purpose of the legislation, the statute provides the Secretary with the authority to cause complaints to be served upon any alleged violators and hold hearings thereon. 7 U.S.C. § 193(a). In addition to other remedies specified in the statute, § 193(b) permits the Secretary to "assess a civil penalty of not more than $10,000 for each ... violation" of the act. Section 193(b) goes on to state the following with respect to the Secretary's power to enforce any civil penalty assessments:

If, after the lapse of the period allowed for appeal or after the affirmance of such penalty, the person against whom the civil penalty is assessed fails to pay such penalty, the Secretary may refer the matter to the Attorney General who may recover such penalty by an action in the appropriate district court of the United States.

Sections 193(a) and (b), read together, contemplate that a civil penalty must first be assessed by the administrative agency before suit may be filed in a district court.

The Packers Act does not, however, prescribe a time limit within which an action to enforce an administratively imposed penalty must be brought. Accordingly, as both parties acknowledge, reference must be made to 28 U.S.C. § 2462 for the applicable statute of limitations. That section provides as follows:

Except as otherwise provided by Act of Congress, an action, suit or proceeding for the enforcement of any civil fine, penalty, or forfeiture, pecuniary or otherwise, shall not be entertained unless commenced within five years from the date when the claim first accrued if, within the same period, the offender or the property is found within the United States in order that proper service may be made thereon.

§ 2462. There is no dispute that the instant action concerns "an action, suit or proceeding for the enforcement of [a] civil fine, penalty, or forfeiture," within the intendment of the statute. The issue raised by the respective motions concerns when plaintiff's "claim first accrued."

The defendants' motion presents three alternative dates on which the plaintiff's claim first accrued, all of which would render the instant action time-barred. First, defendants argue that the government's present claim accrued on the date of the underlying violation. Second, defendants argue that the date on which the § 2462 time limitation began to run was November 27, 1989, when the defendants' petition for review was denied by the Third Circuit. Third, assuming that the court does not accept either of the preceding dates, defendants argue that pursuant to the terms of the May 22, 1991 Order, the government's present claim began to accrue on the date each defendant was served with the order, i.e., the "effective date" of the May 22, 1991 Order. As noted above, defendants were served with a copy of the order on June 4, and June 5, 1991, respectively. Defendants contend, accordingly, that the government's action to enforce a civil penalty, instituted on August 27, 1996, is time-barred pursuant to the five-year statute of limitations imposed under § 2462.

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